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ROSH HA-AYIN, Israel, November 29, 2011 /PRNewswire/ --

In the news release, "Alon Holdings Blue Square - Israel Ltd. Announces Financial Results for the First Nine Months and Third Quarter of 2011" issued on 28 Nov 2011 12:32 GMT, by Alon Holdings Blue Square Israel Ltd NYSE:BSI over PR Newswire, we are advised by a representative of the company that the "Supermarket segment revenues" information sections now include the following sentences, "Sales per square meter amounted to NIS 13,691 (U.S. $3,688) in the first nine months of 2011, compared to NIS 13,998 in the comparable period last year." and "Sales per square meter amounted to NIS 4,524 (U.S. $1,219) in the third quarter of 2011 compared to NIS 4,898 in the comparable quarter last year."
Complete, corrected release follows:

Alon Holdings Blue Square-Israel Ltd. (NYSE and TASE: BSI) today announced its
financial results for the first nine months and third quarter ended September 30, 2011.

Highlights:

- As a result of the inclusion of the results of Dor Alon, and the creation
of the largest retail group in Israel, the Company's sales in the first nine months of
2011 amounted to NIS 9,443 million (U.S. $2,544 million) (increase of 71%) and the
operating profit amounted to NIS 270 million (U.S. $72.8 million) (increase of 40%
compared to the comparable period last year).
- In the Supermarket segment the same store sales (SSS) decreased in the first
nine months of 2011 by 0.8% compared to the comparable period last year. In the third
quarter of 2011 the same store sales decreased by 6.6%1 compared to the comparable
quarter last year mainly due to the public protest in Israel that commenced at the end
of the second quarter this year caused a decrease in selling prices to consumers and
decrease in demands and due to the timing of the Tishrey Holidays2, the effect of
which was reflected in the third and fourth quarter this year and were fully included
in the third quarter last year. Dor Alon's operating profit increased by 7% in the
third quarter of 2011 compared to the comparable quarter last year. Effective
September, marketing margin was eroded as a result of the government decision.
- As a result of an investment in option for the purchase of 49% of Diners
Israel, The Company recorded in the first half of 2011 financial income from
revaluation of the option. In the third quarter, once the agreement came into force
and the option was exercised, the Company recorded a tax benefit.
- The net income in the first nine months of 2011 amounted to NIS 150 million
(U.S. $40.4 million) (increase of 145%).

1. Gross sales in stores that operated fully in both periods.

2. Tishrey Holidays - are the holidays during the first month of the Jewish calendar.

KEY FIGURES for the nine months and the third quarter compared to the comparable
periods last year (the statements of Dor Alon were consolidated for the first time in the
fourth quarter of 2010):

Revenues (including government levies) for the first nine months of 2011 were NIS
11,555.6 million(U.S. $3,113.0 million), compared to NIS 5,520.3 million in the comparable
period last year - an increase of 109.3 %. The main increase in revenues was due to the
inclusion of the results of Dor Alon. Dor Alon's revenues in the first nine months,
including government levies of NIS 2,112.4 million (U.S. $569.1 million) amounted to NIS
6,138.4 million (U.S. $1,653.7 million).

Revenues from sales, net

Supermarkets segment revenues, net - in the first nine months of 2011 amounted to NIS
5,076.1 million (U.S. $1,367.5 million) as opposed to NIS 5,155.0 million in the
comparable period last year, a decrease of 1.5%. (Decrease in sales of SSS stores of 1.2%
and decrease in the contribution of non SSS branches (8 openings less 4 closures during
the last 12 months)). The main decrease was due to the public protest in Israel that
commenced at the end of the second quarter this year that caused a decrease in selling
prices to consumers and decrease in demands and impaired the sales in the Supermarkets
segment due to the timing of the Tishrey Holidays, the effect of which was reflected in
the third and fourth quarter this year and were fully included in the third quarter last
year. Sales per square meter amounted to NIS 13,691 (U.S. $3,688) in the first nine months
of 2011, compared to NIS 13,998 in the comparable period last year.

Revenues of the Commercial and Fueling sites segment in the first nine months of 2011
amounted to NIS 4,002.1 million (U.S. $1,078.1 million) as compared to NIS 3,177.6 million
in the first nine months of 2010[4], an increase of 25.9%. The main increase stems from
increase in the quantitative sales as a result of opening new fueling sites, an increase
in sales in the convenience stores and an increase in the price of petrol between the
periods.

Non-food segment - a decrease in revenues of approximately 1.3% from NIS 347.3 million
in the first nine months of 2010 to NIS 342.9 million (U.S. $92.4 million) in the first
nine months of 2011. The decrease in revenues was mainly due to a decrease in sales to
franchisees stemming from increased competition in the sector and the relocation of the
Naaman storage utilities to the new logistic center.

Real estate segment -increase in revenues of approximately 21.7% from NIS 18 million
in the first nine months of 2010 to NIS 21.9 million (U.S. $5.9 million) in the first nine
months of 2011. The increase in revenues is mainly due to the increase in leased premises
and from the effect of the increase of CPI.

Gross Profit in the first nine months of 2011 amounted to approximately NIS 2,226.3
million (U.S. $ 599.8 million) (approximately 23.6% of revenues) compared to gross profit
of approximately NIS 1,572.8 million (28.5% of revenues) in the first nine months of 2010.
Excluding the effect of Dor Alon's results, the gross profit decreased by NIS 18.4 million
(U.S. $4.9 million). The decrease in the gross profit is mainly due to a decrease in sales
of the supermarkets segment (the gross operating profit amounted to 27.9% in the first
nine months of 2011 compared to 27.6% in the first nine months of 2010) and a decrease in
sales and the gross profit margin in the non food segment that was partly offset by an
increase in revenues from the real estate segment.

Selling, general, and administrative expenses in the first nine months of 2011
amounted to approximately NIS 1,956.6 million (U.S. $ 527.1 million) compared to NIS
1,380.6 million in the comparable period last year, an increase of 41.7%.

Excluding the effect of Dor Alon's results the selling, general and administrative
expenses increased by NIS 30.3 million (U.S. $8.2 million)(2.2%). The main increase was
recorded in the supermarkets segment and was mainly due to an increase in rental fees
affected by the change in CPI and updated lease agreements, an increase in municipal taxes
and an increase in payroll expenses that was partly offset by a decrease in advertising
expenses.

Operating profit (before other gains and losses and increase in the fair value of
investment property) in the first nine months of 2011 amounted to approximately NIS 269.7
million (U.S $ 72.6 million) compared to operating income of NIS 192.2 million in the
comparable period last year, an increase of 40.3%.

Excluding the effect of Dor Alon's results the operating profit (before other gains
and losses and increase in fair value of investment property) decreased by NIS 48.7
million (U.S. $13.1 million). The decrease in the operating profit was mainly due decrease
in sales in the non-food and supermarkets and non-food segments and due to an increase in
selling, general and administrative expenses mainly in the supermarkets segment.

Increase in fair value of investment property in the first nine months of 2011, the
Company recorded profit from the increase in the value of investment property in the
amount of NIS 28.1 million (U.S $ 7.6 million) including NIS 18.1 million (U.S $ 4.9
million) from revaluation of property in Kiryat Hasharon, Netanya, half of which was sold
and NIS 7.0 million (U.S $ 1.9 million) from revaluation of "Hadar mall" in Jerusalem in
the first nine months of 2010 the Company recorded a gain from increase in value of
investment property in the amount of NIS 18.9 million.

Other income and expenses, net in the first nine months of 2011 the Company recorded
other expenses, net in the amount of NIS 7.1 million (U.S $ 1.9 million) compared to net
expenses of NIS 11.2 million in the comparable period last year. These expenses included
costs relating to the relocation of part of the BEE group companies to the logistic center
in Beer Tuvia and disposal of property and equipment.

Operating profit in the first nine months of 2011 was NIS 290.7 million (U.S. $ 78.3
million) compared to operating profit of NIS 199.8 million in the comparable period last
year, an increase of 45.5%. Excluding the effect of Dor Alon's results the operating
profit decreased by NIS 35.4 million (U.S. $ 9.5 million).

Financial Expenses, Net for the first nine months of 2011 were NIS 134.9 million (U.S.
$36.3 million) compared to financial expenses, net of NIS 107.5 million in the comparable
period last year. Excluding the effect of the results of Dor Alon the finance expenses
decreased by NIS 24.5 million (U.S. $6.6 million). The decrease was mainly a result of
finance income from the revaluation of the option to purchase shares of Diners and
capitalization of borrowing costs of projects under construction in the real estate
segment that was partly offset by an increase in the Company's indebtedness following the
purchase of Dor Alon and the increase of the Israeli CPI (the CPI increased in first nine
months of 2011 by 2.75% compared to increase of 1.62% in the comparable period last year).

Taxes on Income for the first nine months of 2011 were approximately NIS 12.1 million
(U.S. $3.3 million) (7.5% effective tax rate compared to a statutory tax rate of 24%)
compared to NIS 30.4 million (effective tax rate of 33% compared to a statutory tax rate
of 25%) in the comparable period last year. The decrease in tax expenses in this period
derives from recording liability for deferred income taxes in the statements of operations
in the amount of NIS 37 million in the third quarter of this year with the consummation of
the Diners transaction.

Net Income in first nine months of 2011 was NIS 149.8 million (U.S. $ 40.3 million)
compared to net income of NIS 61.3 million in the comparable period last year. The
increase in net income in this period compared to the corresponding period last year
mainly derives from including Dor Alon's results, the impact of the option revaluation of
Diners and tax benefit on exercising the option. The net income for the first nine months
of 2011 attributable to the equity holders of the company was NIS 128.8 million (U.S.
$34.7 million), or NIS 1.96 per share (U.S. $ 0.53), while the portion attributable to the
non-controlling interests was NIS 20.9 million (U.S. $5.6 million).

Cash Flows in the First Nine Months of 2011

Cash Flows from Operating Activities: Net cash flows deriving from operating
activities in the first nine months of 2011 amounted to NIS 486.2 million (U.S. $131.0
million) compared to cash flows from operating activities of NIS 204.7 million in the
first nine months of 2010. The inclusion of Dor Alon's results contributed to the cash
flow from operating activities in the first nine months of 2011 the amount of NIS 88.4
million.

The increase in cash flows from operating activities is mainly due to a decrease in
working capital in the Supermarket segment, from advancing receipts from credit card
companies and from the increase in advances from purchasers of apartments of NIS 98.3
million (U.S $26.5 million).

Cash Flows from Investing Activities: Net Cash flows used in investing activities in
the first nine months of 2011 amounted to approximately NIS 477.4 million (U.S. $128.6
million) compared to net cash flows of NIS 463.2 million used in investing activities in
the first nine months of 2010. Cash flows used in investing activities in the first nine
months of 2011 included mainly purchases of property and equipment, investment property
and intangible assets, in a total amount of NIS 272.9 million (U.S $ 73.5 million), the
grant of long term loans of NIS 155.1 million, ($ 41.8 million), mainly to controlling
shareholders and investment in restricted deposits in the amount of NIS 98.3 million (U.S
$ 26.5 million), and an investment in an associate (Diners) of NIS 36.4 million (U.S $ 9.8
million). Cash flows used in investing activities in the first nine months of 2010
included mainly purchases of property and equipment, intangible assets, investment
property and payments on account of real estate in a total amount of NIS 229.5 million, a
net investment in marketable securities of NIS 220.7 million and the grant of a loan of
NIS 27.4 million to a proportionally consolidated company.

Cash Flows from Financing Activities: Net Cash flows used in financing activities in
the first nine months of 2011 amounted to NIS 16.8 million (U.S $4.5 million) compared to
net cash flow used in financing activities of NIS 82.4 million in the first nine months of
2010. Cash flows used in financing activities in the first nine months of 2011 included
mainly repayment of bonds in the amount of NIS 140.7 million (U.S $37.9 million),
repayment of loans in the amount of NIS 181.7 million (U.S $48.9 million), and payments of
interest in the amount of NIS 170.0 million (U.S $45.8 million), this was offset by an
increase in short term bank credit in the amount of NIS 373.1 million (U.S $100.5 million)
and receiving loans in the amount of NIS 132.5 million (U.S $35.7 million), . Net Cash
flows used in financing activities in the first nine months of 2010 included mainly
repayment of long term loans of NIS 99.6 million, the payment of interest of NIS 99.6
million, payment of dividends of NIS 75 million to the Company's shareholders and NIS 17.6
million to the non-controlling interests and acquisition of treasury shares of NIS 4.3
million. This was offset by issue of debentures in the amount of NIS 108.6 million and an
increase in short term credit net in the amount of NIS 100.3 million.

Comments of Management

Mr. David Weisman Active Chairman and Chief Business manager - "the results of the
first nine months of the year are characterized by a positive contribution of the
organizational change in which the food chain "Mega", "Eden Teva" and the fuel company
"Dor Alon" operate under one "umbrella". Another contribution is to the profitability is
the exercise of the option into a full holding of 49% in Diners, which among others,
strengthens the customers' club YOU which already has over one million customers and is
doing it successfully.

In September of this year, the fuel administration, in a disproportionate action,
reduced the marketing margin on supervised fuels in self service and full service by 18.4
and 11.5 Agorot per liter, respectively; this reduction may adversely and significantly
affect the business results of Dor Alon.

The Company filed a petition with the high court of justice seeking to suspend and
even cancel the reduction of the marketing margin. The court resolved to remand the case
for hearing at the ministry of infrastructures and allotted a three month period to render
a decision in this case. Until such decision is made, the reduction shall remain in force.

Dor Alon acts to reduce the effect on its profitability following the reduction of the
marketing margin.

BSRE continues to expand its operations and presents an increase of approximately 12%
in income from rental fees and an improvement in NOI of approximately 12.1% in the first
nine months of 2011 compared to the corresponding period last year.

Currently, we continue our preparations to launch a virtual operator (MVNO) and act to
install and assimilate computerized system (billing). We intend to commence deployment in
the fourth quarter in points of sale and service in Mega and Dor Alon branches and offer
the customer club members of the Company a unique range of services and mobile phones. The
launch of the network is expected to take place in the second quarter of 2012."

In regards to the supermarket and non-food segments, Mr. Zeev Vurembrand, CEO, said:
"Deepening competition and the public protest were two trends that significantly impacted
the retail food segment in the first nine months of the year. Deepening competition was
reflected in accelerated opening of commercial spaces and converting branches into hard
discount formats. The public protest impacted consumption habits, in general, and food
consumption, in particular, which is shown in decline of sales in the supermarkets segment
in the third quarter. In addition, the increase in expenses related to minimum wages and
rental fees caused an erosion of the operating income in the supermarkets segment.

The Company commenced taking efficiency measures cutting back on headquarters expenses
and selling expenses including downsizing personnel in the headquarters and other
expenses. These measures are taken as part of the Company's response to the new
competitive situation.

We intend to open under the multi annual development plan, that was presented earlier
this year, approximately 15 branches in a total area of some 18 thousand sq.m until the
end of 2012, where most of the branches are in "Mega in Town" format.

Eden Teva shall conclude at the beginning of 2012 the second stage of the chain's
deployment which shall consist 20 branches - 11 independent branches and 9 Eden branches
in Mega. In 2011, we shall bring Eden Teva to operating balance and in 2012, we expected
to show operating profitability.

The private brand represents a major step in the Company's operations and its sales
will reach at the end of the year 14% of the total chain's sales. The private brand Mega
confers upon us flexibility and dynamics in prices and product range and we intend to
continue developing new, innovative and breakthrough products."

Results for the third quarter of the year 2011

Gross Revenues (including government levies) for the third quarter of 2011 were NIS
3,956.1 million(U.S. $1,065.8 million) compared to revenues of approximately NIS 1,920.8
million in the comparable quarter last year, an increase of 106.0 %. The majority of the
increase in revenues derives from including the results of Dor Alon. Excluding the effect
of Dor Alon's results the revenues this quarter decreased by NIS 118.9 million (U.S. $
32.0 million) (6.1%) compared to the comparable quarter last year.

The decrease in the revenues compared to the comparable quarter last year is mainly
due to the public protest in Israel that commenced at the end of the second quarter this
year and caused a decrease in selling prices to consumers and a decrease in demand and
impaired the sales in the supermarkets segment and due to the timing of the Tishrey
Holidays, the sales of which were mainly included in the third and fourth quarter this
year and were fully included in the third quarter of last quarter.

Supermarket segment revenues, net -a decrease in revenues of 6.5% from NIS 1,790.5
million in the third quarter of 2010 to NIS 1,673.1 million (U.S $450.7 million) in the
current quarter. The decrease in revenues was mainly due to a decrease in same store sales
(SSS) at a rate of 6.7%, as explained above. Sales per square meter amounted to NIS 4,524
(U.S. $1,219) in the third quarter of 2011 compared to NIS 4,898 in the comparable quarter
last year.

Revenues of the Commercial and Fueling sites segment for the third quarter of 2011
amounted to NIS 1,425.6 million (U.S. $384.0 million) as compared to NIS 1,107.5 million
in the comparable quarter of 2010[5]. The increase in revenues derives from the same
reasons described in the analysis of the first nine months of 2011 results.

Non - Food segment revenues - a decrease in revenues of 1.3% from NIS 123.1 million in
the third quarter of 2010 to NIS 121.5 million (U.S. $32.7 million) in the current
quarter. The decrease mainly derived from the reasons described in the analysis of the
results for the first nine months of 2011.

Real Estate segment revenues - rental fees from external parties of NIS 7.2 million in
the third quarter of 2010 compared to NIS 7.2 million (U.S. $1.9 million) in the current
quarter, with no change.

Gross Profit of the third quarter of 2011 amounted to approximately NIS 744.8 million
(U.S. $ 200.6 million) compared to gross profit of approximately NIS 546.1 million in the
comparable quarter of 2010. Excluding the effect of Dor Alon's results, gross profit
decreased by NIS 31.8 million (U.S. $ 8.6 million). The decrease in the gross profit
derives from a decrease in sales of the supermarkets and non - food segments and was
partly offset by an increase in the gross profit rate mainly in the Supermarkets segments
due to the a different mixture in sales among the formats "Mega Boo"l and "Zol Beshefa"
compared "Mega in Town" and "Eden" (the gross profit rate amounted to 28.1% in the current
quarter compared to gross profit rate of 27.7% in the comparable quarter last year).

Selling, General and Administrative Expenses in the third quarter of 2011 amounted to
NIS 672.9 million (U.S. $ 181.2 million) compared to approximately NIS 489.0 million in
the comparable quarter, an increase of approximately 37.6%. Excluding the effect of Dor
Alon's results, selling, general and administrative expenses decreased by NIS 1.9 million
(U.S. $ 0.5 million).

Operating Profit (before other gains and losses and increases in the fair value of
investment property) in the third quarter of 2011 amounted to NIS 71.9 million (U.S $ 19.3
million) compared to NIS 57.1 million in the third quarter of 2010, an increase of 25.9%.
Excluding the effect of Dor Alon's results, Operating Profit (before other gains and
losses and increases in the fair value of investment property) decreased by NIS 29.9
million (U.S $ 8.0 million). The decrease is explained mainly from the same reasons
described above in the analysis of the first nine months of 2011 results.

Increase in the Fair Value of Investment Property In the third quarter of 2011, the
Company recorded gain from appreciation of investment property in the amount of NIS 8.7
million (U.S $ 2.3 million). The majority of the profit stems from revaluation of "Hadar
Mall", in Jerusalem . In the third quarter of 2010, the Company recorded a gain from
increase in value of investment property amounting to NIS 5.7 million.

Other income and expenses, Net In the third quarter of 2011, the Company recorded
other expenses, net of NIS 1.5 million (U.S. $ 0.4 million), compared to net expenses of
NIS 4.1 million in the comparable quarter. The expenses this quarter included costs
relating to the transfer of certain BEE Group companies to the new logistic center in Beer
Tuvia and the disposal of the property and equipment.

Operating Profit amounted to approximately NIS 79.8 million (U.S. $ 21.5 million)
compared to operating profit of NIS 58.7 million in the third quarter of 2010. Excluding
the effect of Dor Alon's results, Operating Profit decreased by NIS 23.6 million (U.S $
6.4 million).

Financial Expenses, net, for the third quarter of 2011 were NIS 79.0 million (U.S.
$21.3 million) compared to financial expenses, net of NIS 50.8 million in the comparable
quarter last year. Excluding the effect of Dor Alon, the financial expenses decreased by
NIS 5.3 million (U.S. $1.4 million). The decrease in net financial expenses this quarter
compared with comparable quarter last year derives mainly from decrease of the CPI (the
CPI increased in the third quarter of 2011 by 0.58% compared to an increase of 1.23% in
the comparable period last year) and from capitalization of financial costs in the real
estate segment and was partially offset from an increase in the Company's indebtedness
from the purchase of Dor Alon.

Taxes on Income for the third quarter of 2011 tax benefit amounted to NIS 34.7 million
(U.S. $ 9.3 million) compared to tax expenses of NIS 4.8 million (effective tax rate of
61% compared to a statutory tax rate of 25%) in the comparable quarter last year. The
decrease in tax expenses this quarter derived from recording liability for deferred income
taxes in the statements of income of NIS 37 million (U.S. $ 10.0 million) in the third
quarter this year with the consummation of the Diners transaction.

Net Income for the third quarter of 2011 amounted to NIS 40.3 million (U.S. $ 10.8
million) compared to a net income of NIS 3.0 million in the third quarter of 2010. The
increase in the net income in this quarter compared to the corresponding quarter last year
derived mainly from including the results of Dor Alon and the effect of Diners option on
tax revenues in the taxes on income. The net income for the third quarter of 2011
attributable to equity holders of the Company, was NIS 33.8 million (U.S. $9.1 million),
or NIS 0.54 per share (U.S. $ 0.14), while the portion attributable to the non-controlling
interests was NIS 6.4 million (U.S. $1.7 million).

Cash Flows in the third quarter of 2011

Cash Flows from Operating Activities: Net cash flows deriving from operating
activities, amounted to NIS 50.0 million (U.S. $ 13.5 million) in the third quarter of
2011 compared to NIS 118.9 million in the comparable quarter last year. The decrease in
cash flows from operating activities was mainly due to a decrease in sales in the
supermarkets segment and decrease in working capital and was partly offset from the
inclusion of Dor Alon results that contributed in the quarter NIS 31.2 million (U.S $ 8.4
million) and from advancing proceeds from credit card companies.

Cash Flows from Investing Activities: Net Cash flows used in investing activities in
the third quarter of 2011 amounted to NIS 177.0 million (U.S. $47.7 million) compared to
net cash flows of NIS 86.3 million from investing activities in the corresponding quarter
of last year. The cash flows used in investing activities in the third quarter of 2011
mainly included the purchase of property and equipment, intangible assets investment
property of NIS 96.2 million (U.S. $25.9 million), investments in restricted deposits of
NIS 2.9 million (U.S. $0.8 million), investment in short term deposits, net in the amount
of NIS 8.2 million (U.S. $2.2 million) and investment in affiliate of NIS 36.4 million
(U.S. $13.6 million) and was offset by proceeds received from realizing investment
property amounting to NIS 50.6 million (U.S. $13.6 million). Cash used in investing
activities in the third quarter of 2010 mainly included the purchase of property and
equipment, intangible assets investment property and payments on account of real estate in
a total amount of NIS 78.5 million and net investment in marketable securities of NIS 3.7
million and grant of loans to a proportionally consolidated company of NIS 8.4 million net
of interest received amounting to NIS 3.9 million.

Cash Flows used in Financing Activities: Net Cash flows deriving from financing
activities amounted to NIS 108.2 million (U.S $ 29.6 million) in the third quarter of 2011
as compared to net cash used in financing activities of NIS 24.1 million in the comparable
quarter last year. Cash flows deriving from financing activities in the third quarter of
2011 included mainly long term loans received of NIS 23.0 million (U.S. $6.1 million),
change in short term credit of NIS 203.0 million (U.S. $54.7 million) and was offset by
repayment of bonds of NIS 2.2 million (U.S. $0.6 million), repayment of long term loans of
NIS 55.6 million (U.S. $14.9 million) and interest paid of NIS 59.6 million (U.S. $16.1
million). Cash flows used in financing activities in the third quarter of 2010 included
mainly a decrease in short term credit net in the amount of NIS 66.0 million, repayment of
long term loans amounting to NIS 26.2 million, interest paid of NIS 41.1 million net of
consideration for the issue of debentures amounting to NIS 108.6 million.

Additional Information

1. As of September 30, 2011, the Company operated 211 supermarkets divided as follows:
Mega In Town -119; Mega Bool - 69; Zol BeShefa - 12 and Eden Teva Market -16 of which 5
Eden within Mega. Dor Alon operated 193 fueling stations and 195 convenience stores in
various formats and in the Non-food segment, the Company operated 253 branches (most are
franchised).

2. EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)[6] in the
first nine months of 2011 was NIS 476.0 million (U.S. $ 128.2 million) (5.0% of revenues)
compared to NIS 333.9 million (6.0% of revenues) in the first nine months of 2010.

EBITDA in the third quarter of 2011 was NIS 140.5 million (U.S. $ 37.8 million) (4.4 %
of revenues) compared to NIS 107.6 million (5.6% of revenues)in the comparable quarter of
2010.

3. Diners transaction

In May 2011, Alon Holdings and Dor Alon (thereafter - the buyers) and Cal (thereafter
- Cal) signed an exercise of the agreement to purchase 49% of Diners held by Cal in
exchange for a loan granted by Cal to the buyers.

In July, the Company completed the conditions and the buyers paid the loan in the
amount of NIS 36 million which Cal granted them.

Alon Holdings and Dor Alon handled their financial statements by an agreement to buy
Diners as option for purchasing stock options and recorded in the period income before
taxes from revaluation of approximately NIS 102 million (U.S. $ 27.5 million). In the
third quarter, upon the consummation of the purchase, the Company recorded in the
statements of income liability in respect of deferred income taxes of NIS 37 million (U.S
$ 9.7 million) attributed to the revaluation gains from the option.

As of the date of this report, the Company has not yet completed the attribution of
the purchase cost to the portion purchased in identifiable assets and liabilities of
Diners. The attribution of the purchase cost, as above, was performed on the basis of an
initial recognition and therefore, in the following reporting periods some adjustments may
be necessary for this attribution.

4. Legislative amendments

Reduction of marketing margin on supervised fuels: In September of this year, the fuel
administration reduced the marketing margin on supervised fuels by 11.5 - 18.4 Agorot per
liter; this reduction is expected to adversely and significantly affect the business
results of Dor Alon.

5. Proposals for legislative amendments

a. Amendments in Corporate tax rates

At the beginning of November 2011, a memorandum of law for economic and social change
was published (legislative amendments) (taxes) - 2011 (the memo of law). Under this memo
of law, it is proposed, inter alia, to cancel effective 2012 the reduction outline of
corporate taxes. It is also proposed to raise the corporate tax to 25% in 2012. In view of
the proposal to raise the corporate tax rates to 25% in 2012, the tax rates on capital
gain and real appreciation shall be raised respectively. The deferred tax balances
included in the financial statements as of September 30, 2011, are calculated according to
the tax rates in effect as of the date of the financial statements and do not take into
account the effects that may derive from the memo of law. Said effects shall be included
in the financial statements to be published effective with the date on which the law will
be substantively enacted. The Company estimates that based on the deferred tax balances as
of September 30, 2011, the effect on income following the memo of law shall be reflected
by a decrease of NIS 19 million (U.S $ 5.1 million), the decrease attributed to the
Company's shareholders would amount to NIS 13 million (U.S $ 3.5 million) and the portion
attributed to non controlling interests would amount to NIS 6 million (U.S $ 1.3 million).
The effect on the capital reserve shall be reflected by a decrease of NIS 6 million (U.S $
1.6 million), attributed to the Company's shareholders, an amount that may decrease or
increase according to the approval of the memo of law.

b. Recommendations submitted to the government

On September 26, 2011, the committee for economic and social change, aiming to review
and propose solutions for the high cost of living in Israel, submitted its recommendations
for the government's review, the essence of which as to fueling sites and direct trade and
marketing of Liquefied petroleum gas relating to the Company.

The encouragement of competition in the fueling and commercial sites.

- To initiate legislative procedures that will release immediately private
gas stations from exclusivity agreements with the retail fuel companies.
- To give priority, by planning procedures for individuals, to entities that are
not one of the large four retail fuel companies and instruct the planning bodies to
plan plots of land for 40 new fueling stations within 2 years and market them to
individuals.
- To expedite applying universal fueling device standards.
- To implement immediate supervision on diesel fuel at the door of refineries
and fueling stations.
- To impose on the national infrastructures ministry to map geographic areas in
which the competition is low and oblige sale of stations in these areas to individuals
to encourage competition.

The encouragement of competition in the area of direct marketing of Liquefied
petroleum gas.

- To supervise the price at the door of the refinery and the price for the
consumer.
- To reform the area of securing free access for carriers to increase
competition.

It is indicated that the implementation of legislative amendments and the proposal for
legislative amendments may have an adverse effect in part, on the business results of per
Alon at this stage it is impossible to estimate the extent of the effect.

6. Blue square Real Estate - Givon Parking , Tel Aviv

On October 11, 2011, BSRE received a notice from Tel Aviv municipality (the
municipality and the notice) pursuant to which, all of the conditions to approve the BOT
agreement of "Givon Parking" in Tel Aviv were fulfilled, in which BSRE shall hold in equal
parts with its partners in the wholesale market companies. "Givon Parking" will be
composed of approximately 1,000 parking lots adjacent to the wholesale market project. On
November 13, 2011, the authority for use of property was delivered for the purpose of
construction work. As per BSRE, construction works shall commence in the coming weeks. In
return for constructing the parking lot, BSRE and its partners shall be entitled to
operate and collect rental fees for parking for a period of 23 years from delivering the
authority for use of property. The total establishment cost of the parking lot including
related costs is estimated at NIS 144 million (U.S $ 38.8 million), the share of BSRE is
approximately NIS 72 million (U.S $ 19.4 million).

7. Naaman

In November 2011, BEE group issued a full tender offer to purchase 4.8 million shares
of Naaman that are not held by the group for NIS 6.53 (U.S $ 1.8) per share. The last date
for accepting the tender offer was on November 22, 2011, and up to date, an acceptance
notice of 1.48 million shares (10.2%) was received in return for NIS 9.7 million (U.S $
2.6 million). As of the date of this report, BEE group holds 77% of Naaman.

8. Dividend distribution
On November 28, 2011 the Board of directors of the Company decided on interim dividend
distribution for the year 2011, in the amount of NIS 75 million (U.S $20.2 million), NIS
1.13 per share (U.S.$ 0.30 per share/ADS). The ex-div date for this dividend distribution
is on December 15, 2011 and the dividend will be payable on or about December 29, 2011.

NOTE A: Convenience Translation to Dollars

The convenience translation of New Israeli Shekel (NIS) into U.S. dollars was made at
the exchange rate prevailing at September 30, 2011: U.S. $1.00 equals NIS 3.712. The
translation was made solely for the convenience of the reader.

Alon Holdings Blue Square- Israel Ltd. (hereinafter: "Alon Holdings") is the leading
retail company in the State of Israel and operates in four reporting segments: In its
supermarket segment, Alon Holdings, through its 100% subsidiary, Mega Retail Ltd.,
currently operates 211 supermarkets under different formats, each offering a wide range of
food products, "Near Food" products and "Non-Food" products at varying levels of service
and pricing. In its "Non-Food" segment, Alon Holdings, through its 100% subsidiary BEE
Group Retail Ltd., operates specialist outlets in self operation and franchises and offers
a wide range of "Non-Food" products as retailer and wholesaler. In the Commercial and
Fueling Sites segment, through its 78.38% subsidiary, which is listed on the Tel Aviv
stock exchange ("TASE"), Dor Alon Energy in Israel (1988) Ltd is one of the four largest
fuel retail companies in Israel based on the number of petrol stations and a leader in the
field of convenience stores. Dor Alon operates a chain of 193 petrol stations and 195
convenience stores in different formats in Israel. In its Real Estate segment, Alon
Holdings, through its TASE traded 78.26% subsidiary Blue Square Real Estate Ltd., owns,
leases and develops yield generating commercial properties and projects.

Forward-looking statements

This press release contains forward-looking statements within the meaning of safe
harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements may include, but are not limited to, plans or projections about
our business and our future revenues, expenses and profitability. Forward-looking
statements may be, but are not necessarily, identified by the use of forward-looking
terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans,"
"believes," and words and terms of similar substance. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause actual events,
results, performance, circumstance and achievements to be materially different from any
future events, results, performance, circumstance and achievements expressed or implied by
such forward-looking statements. These risks, uncertaintiesand other factors include, but
are not limited to, the following: the effect of the recession in Israel on the sales in
our stores and on our profitability; our ability to compete effectively against low-priced
supermarkets and other competitors; quarterly fluctuations in our operating results that
may cause volatility of our ADS and share price; risks associated with our dependence on a
limited number of key suppliers for products that we sell in our stores; the effect of an
increase in the minimum wage in Israel on our operating results; the effect of any actions
taken by the Israeli Antitrust Authority on our ability to execute our business strategy
and on our profitability; the effect of increases in oil, raw material and product prices
in recent years; the effects of damage to our reputation or to the reputation of our store
brands due to reports in the media or otherwise; and other risks, uncertainties and
factors disclosed in our filings with the U.S. Securities and Exchange Commission (SEC),
including, but not limited to, risks, uncertainties and factors identified under the
heading "Risk Factors" in our annual report on Form 20-F for the year ended December 31,
2010. You are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. Except for our ongoing obligations
to disclose material information under the applicable securities laws, we undertake no
obligation to update the forward-looking information contained in this press release.

The Company includes segment information according to IFRS 8. Company's management has
set the operating segments based on the internal reports.

The Company presents four reportable segments: Supermarkets, Commercial and fueling
sites, Non-food (Retail and Wholesale) and Real estate

The Company's four operating segments consist of the following:

1. Supermarkets - The Company operates the second largest food retail chain in Israel.
Through its subsidiary, Mega Retail Ltd. ("Mega Retail"), which operates Supermarket
branches, the Company offers a wide range of food and beverage products and "Non-food"
items, such as houseware, toys, small electrical appliances, computers and computer
accessories, entertainment and leisure products and textile products and "Near-Food"
products, such as health and beauty aids, products for infants, cosmetics and hygiene
products. As of September 30, 2011, Mega Retail operated 211 supermarkets. This segment
also includes properties owned through Blue Square Real Estate ("BSRE"), in connection
with the supermarket operation of Mega Retail's stores (including warehouses and offices).

2. Commercial and fueling sites - Through its subsidiary Dor-Alon the Company is
engaged in the development, construction and operation of vehicle fueling stations,
adjacent commercial centers and independent convenience stores, marketing of fuel products
and other products through the fueling stations and convenience stores and direct
marketing of distillates to customers. The commercial and fueling sites segment is
presented according to the published financial statements of Dor-Alon, with
reclassification of credit card fees and with the amortization of the excess of cost
arising at the time of acquisition allocated to the reconciliation between the operating
profit of the segment and the total operating profit.

3. Non-food (Retail and Wholesale) -Mostly through its subsidiary, BEE Group Retail
Ltd. ("BEE Group"), the Company is engaged in non-food retail and wholesale activities. As
of September 30, 2011, the Company operated 253 non-food retail outlets, mostly through
franchisees, with specialties in houseware and home textile, toys, leisure, and infant.
This segment also includes properties owned through Blue Square Real Estate ("BSRE") which
are used by the segment.

4. Real Estate - Through its subsidiary BSRE the Company is engaged in generating
yield from commercial centers, logistics centers and offices, land for the purpose of
capital appreciation and deriving long-term yield as well as in the development of the
"Wholesale Market" residency project in Tal Aviv.

2. Tishrey Holidays - are the holidays during the first month of the Jewish calendar.

3. The Company operates in four segments: Supermarkets, Commercial and fueling sites,
Non Food retail and wholesale and Real Estate. Segmental information is included in this
report below.

4. The results of Dor Alon were included effective October 3, 2010 in the results of
Alon Holdings. The data for the first nine months of 2010 were included in this report in
order to enable analysis and trends of the segment performance.

5. The results of Dor Alon were included effective with October 3, 2010 with the
results of Alon Holdings. The data for the third quarter of 2010 were included in this
report in order to enable analysis capability and trends in segment performance.

6. Use of financial measures that are not in accordance with Generally Accepted
Accounting Principles

EBITDA is a measure that is not in accordance with Generally Accepted Accounting
Principles (Non-GAAP) and is defined as income before financial income (expenses) net,
other gains (losses) net, changes in fair value of investment property, taxes,
depreciation and amortization. It is an accepted ratio in the retail industry. It is
presented as an additional performance measure, since it enables comparisons of operating
performances between periods and companies while neutralizing potential differences
resulting from changes in capital structures, taxes, age of property and equipment and its
related depreciation expenses. EBITDA, however, should not be related to as a single
measure or as an alternative to operating income, another performance indicator and to
cash flow information, which are prepared using Generally Accepted Accounting Principles
(GAAP) as indicators of profit or liquidity. EBITDA does not take the costs of servicing
debt and other liabilities into account, including capital expenditures and therefore it
does not necessarily indicate the amounts that may be available to the use of the company
and in addition EBITDA should not be compared to other indicators with similar names
reported by other companies because of differences in the calculation of these indicators.
See the reconciliation between our net income and EBITDA which is presented in this press
release.